Where do you forecast the NZX50 to be at by Christmas 2022 ?

[clearasmud]

I guess I should hold off on the doom narrative until 2025 as this might be more likely.

That's what I've been thinking.

[Beagle]

I think its clear 2022 is going to be another tough year (as per opening post reasons). I voted 11500-12000 and am fully cognisant that the NZX50 is a gross index inclusive of all dividends so I think its going backwards inclusive of dividends for the year. Why ? Stretched valuations are rife in our market with huge numbers of stocks trading on a PE north of 30. In a rising interest rate environment the only defense that's readily apparent, (apart from going short) is value stocks with high dividend yields and growth at a reasonable price stocks, preferably also with a decent dividend yield. Cash and short term deposits also are not as silly idea's as they sound, notwithstanding inflation as they give you the opportunity to buy into weakness at a time of your choosing.

This is a real stock-pickers market and owning an index tracking fund or medium to long dated bonds looks like recipe's to lose money to me.

[Biscuit]

Don't follow the NZX50 and I'm just guessing but I've plugged for 15,000 plus. This is the year we beat covid, the economy normalizes and we are back to business. Interest rates are going to go up, but not enough to make bonds or bank deposits relatively attractive. A lot of the inflation problems are supply problems that will resolve as the world gets over covid without any need for the central banks to push us into recession. I don't really see high p/e ratios in my nzx shares but that may not be representative of NZX50. I have a fairly broad NZ portfolio and only EBO, MFT and FPH are in the 30+ category and I don't see them as particularly over-priced given their performance and on-going prospects. Keeping cash on hand is a good idea and the current volatility and fear is likely going to continue to push share prices down further over the next few weeks. But beyond that, what's going to drive the market down further? We have a swag of companies that continued to power-on despite lock-downs etc and a bunch of companies that will recover as the borders open up.

[Dassets]

Same re positions. If anyone is interested I wrote an article that I threw up on Linkedin last November. I suggest that we may be in for a multi decade high inflationary period. Why? Because we are not in a supply chain squeeze. I think I.heard California ports increased container volumes last year by 16 or 19%. I suggest we may be looking at a form of industrial revolution, Net Zero by 2050. I use a paper written in the 1940s and published in the Oxford Journal of Economics written by a recognized economist. What he wrote supported what I thought. He covered the 1700s and truly the parallels are very similar. Anyway if you want to see why I thought that, and pls I haven't just plucked it, I would be interested in your feedback.


https://www.linkedin.com/pulse/tale-...ohn-southworth

[Aaron]

Same re positions. If anyone is interested I wrote an article that I threw up on Linkedin last November. I suggest that we may be in for a multi decade high inflationary period. Why? Because we are not in a supply chain squeeze. I think I.heard California ports increased container volumes last year by 16 or 19%. I suggest we may be looking at a form of industrial revolution, Net Zero by 2050. I use a paper written in the 1940s and published in the Oxford Journal of Economics written by a recognized economist. What he wrote supported what I thought. He covered the 1700s and truly the parallels are very similar. Anyway if you want to see why I thought that, and pls I haven't just plucked it, I would be interested in your feedback.


https://www.linkedin.com/pulse/tale-...ohn-southworth

Just had a skim read before work, if I understand you, the supply chain issue might be due to a change in manufacturing, to get to net zero carbon emissions by 2050. In the industrial revolution the mechanisation of things in general would have meant people have more "things" that were made of iron or spun etc which lead to an inflation of the commodity inputs, possibly because the extraction industries weren't set up for the increased demand.
I would have thought today we are switching one for another, e.g. mining coal to mining copper or oil to lithium so inflation would only be expected in the commodities for the green revolution.

I had read the stimulus finally getting to the people in the US (a consumption lead society) lead to a massive online shopping spree that overwhelmed the supply chain at the same time covid was affecting it.

I also now realise that I possibly should not be posting on this site and leave it to more thoughtful, intelligent people.

Personally I would not have a clue but suspect massive money printing and ridiculously low interest rates and the debasement of currencies is at the heart of the over consumption and inflation. This is flowing on to disrupt the supply chain along with a pandemic and responses to it. But I have no data to back up that belief, other than looking at historical rates of interest and how quickly money and debt has been created since 2008.

The earlier money printing went into asset prices so we never heard about it, now it is hitting the CPI central banks may have to react. A couple of years of recession might see the supply chain catch up.

There is the possibility like many industries shipping has consolidated down to a few companies who are only just starting to work out their pricing power in a globalised world. They may not want the supply chains to unlock.

[winner69]

I thought this IoT was going to solve the worlds problems

[Beagle]

Don't follow the NZX50 and I'm just guessing but I've plugged for 15,000 plus. This is the year we beat covid, the economy normalizes and we are back to business. Interest rates are going to go up, but not enough to make bonds or bank deposits relatively attractive. A lot of the inflation problems are supply problems that will resolve as the world gets over covid without any need for the central banks to push us into recession. I don't really see high p/e ratios in my nzx shares but that may not be representative of NZX50. I have a fairly broad NZ portfolio and only EBO, MFT and FPH are in the 30+ category and I don't see them as particularly over-priced given their performance and on-going prospects. Keeping cash on hand is a good idea and the current volatility and fear is likely going to continue to push share prices down further over the next few weeks. But beyond that, what's going to drive the market down further? We have a swag of companies that continued to power-on despite lock-downs etc and a bunch of companies that will recover as the borders open up.

Agree with that and in answer to your question, in my opinion, overseas markets, persistent inflation, higher bond yields, lower growth rates, falling house prices, reduced spending power from consumers through inflation eroding their income, lower business and consumer confidence, supply chain issues, Omricon and other potential variants. Its going to be an "interesting" year. I started 2022 with 60% of my portfolio in cash or short term deposits, currently 65% after selling a couple of modest positions with overseas ETF's that are tanking. That speaks for itself in terms of what I think of the short term prognosis for the market. Might start nibbling away at a few things when Omricon case numbers here explode.

[thegreatestben]

Were you buying yesterday Mr B?

[Beagle]

Were you buying yesterday Mr B?

No. Keeping my powder dry at this stage.

[Dassets]

What effectively is happening is that one supply network is being supplanted by another. But the old network needs to continue supply until the new one is capable. For the new network to be established new technologies, material derivatives need to be developed. And for that to occur you need a different infrastructure to allow that to even occur. Exactly what happened in the 1700s with the wholesale move to steam. For instance we were given direction last year that we needed to build one windfarm every 9 to 12 months in NZ until 2050. And that is similar elsewhere in the world. Transport is meant to make a wholesale move away from liquid fuels ie away from supporting network developed over 120 years. And that is meant to happen in 10 years. Virtually no analysis has been done on how to do it just why it should be done. Just like Jean-Luc Picard saying "Make it so" apologies to trekkies if I got that wrong.